| Report fire
New Delhi, May 19: The comptroller and auditor-general of India (CAG) has pulled up SAIL for having bottled up reserves of iron ore fines at its Gua mines, which, if sold, could have fetched Rs 1,507 crore for the company.
The report also says accumulation of these iron ore fines represents an environmental hazard in Jharkhand. Senior SAIL officials said there are plans now to use these fines at a iron pelletisation plant to be set up near Gua at Manoharpur.
According to the CAG’s report, it is economically feasible to supply the iron ore from the Gua mines to Bokaro and Durgapur steel plants of the company, both of which have sinter plants.
The report points out that Bokaro steel plant regularly received iron ore from the Kiriburu mines, 368 km away, and Megahataburu mines, 369 km away, but the plant was accepting iron ore from Gua, at a distance of just 272 km, only to plug the shortages of ore fines.
Similarly, the Durgapur steel plant received iron ore from Bolani mines, which is 319 km away, and not from Gua which is located at a distance of 312 km.
The report highlights that the sale of fines from Gua mines has been very poor.
“Out of the average production of 1.78 million tonnes per annum during 2000-01 to 2004-05, only 0.71 million tonnes, which constitutes a mere 40 per cent, was dispatched and the balance 1.07 million tonnes was being added every year to the accumulated stock of 12.16 million tonnes dumped in the stock yard,” it adds.
The SAIL management, while accepting the fact that the fines had accumulated since 1958, said the stockpile could not be disposed of due to various constraints such as the railways not having adequate capacity to dispatch fines from Gua station, erratic prices and poor quality.
However, CAG has not accepted this argument as 1.52 million tonnes of fines were dispatched from Gua mines in 2005-06 which showed that it was possible to dispose of substantial quantities of fines from these mines.
“This was despite export of large quantities of iron ore fines from the country and significant increase in the price of iron ore fines in recent years,” it adds.
The steel ministry claimed that the Jharkhand government had raised objections to the sale of iron ore for export on the plea that SAIL was not an iron ore trading company.
However, CAG rejected this reply as the audit comment was on the sale of iron ore fines to SAIL’s own plants and not the export of iron ore.
Bridge bar to blocks
Coal reserves worth Rs 6,650 crore remain blocked in the Rajrappa project of the Central Coalfields due to the delay in the completion of a bridge over the river Damodar, reveals the CAG.
The construction of the bridge has been delayed due to non-availability of encumbrance-free land. block II having coal reserves worth Rs 6,650 crore could not be accessed though reserves in blocks I and IV have dwindled.
Central Coalfields did not take possession of 77 acres in two villages despite settling the compensation in 1981-82 and was compelled to virtually abandon section III of block I where 2.9 million tonnes of coal reserves valued at Rs 287 crore remain blocked.
CAG decided to carry out an audit of the project in order to find out the reasons for the gradual decrease in production and steep decline in profitability.